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Governments actually produce money from thin air. The "always must have debt money" is a fallacy.

MCRed 11y ago
You cannot produce value from thin air. When they produce that money, it is a form of taxation because it decreases the value of the previously produced money. Monetary inflation devalues the currency.
- dragonwriter 11y ago
  > You cannot produce value from thin air. Even if true (which, its not, value is created "from thin air" all the time; otherwise, wealth would be zero-sum, and per capita wealth always declining with increasing population), this is irrelevant to the upthread claim which was that governments do not create money. Which is quite obviously false.
- thesimpsons1022 11y ago
  what happens if you double the money supply but economic productivity also doubles? The money is worth exactly the same as before.
atemerev 11y ago
Money is just a reflection of production (i.e. scarcity of production). Due to market forces inertia, monetary supply can be manipulated, but you can't just start printing money left and right without causing inflation; there is a hard science of doing it without disturbing market balance.
- acqq 11y ago
  Which honest economist could have told you that there is "a hard science"? And by the way, western countries mostly don't "print" money to create it, the money creation "invisibly" happens in the financial sector.
  - atemerev 11y ago
    I do work in the financial sector and somewhat aware of it.
- dragonwriter 11y ago
  > Money is just a reflection of production No, its not. The value ascribed to money is, of course, related to what it can be used for and how much of it is floating around, and production in the area where the particular form of money is the preferred medium of exchange is one of the factors that is relevant to that. And, perhaps the statement about governments not creating money meant that governments don't create value. Which would still be wrong, but in different ways.
deleted 11y ago
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calibraxis 11y ago
Things we’re not supposed to notice: - Governments literally stamp their names and politician's faces on money. You're supposed to obtain it and give some back to the government. - There’s a distinction between government and economy, though government enforces capitalism (social relations of "property", police, etc), and attacks other nations which try alternatives. - The money supply is basically bureaucracy-points made on computers. "In God We Trust" is an apt description of how we're not supposed to question simple things. With the moralistic notion of "debt", we religiously consign children to awful fates.

MCRed 11y ago

You cannot produce value from thin air. When they produce that money, it is a form of taxation because it decreases the value of the previously produced money. Monetary inflation devalues the currency.

dragonwriter 11y ago
> You cannot produce value from thin air. Even if true (which, its not, value is created "from thin air" all the time; otherwise, wealth would be zero-sum, and per capita wealth always declining with increasing population), this is irrelevant to the upthread claim which was that governments do not create money. Which is quite obviously false.
thesimpsons1022 11y ago
what happens if you double the money supply but economic productivity also doubles? The money is worth exactly the same as before.

atemerev 11y ago

Money is just a reflection of production (i.e. scarcity of production). Due to market forces inertia, monetary supply can be manipulated, but you can't just start printing money left and right without causing inflation; there is a hard science of doing it without disturbing market balance.

acqq 11y ago
Which honest economist could have told you that there is "a hard science"? And by the way, western countries mostly don't "print" money to create it, the money creation "invisibly" happens in the financial sector.
- atemerev 11y ago
  I do work in the financial sector and somewhat aware of it.
dragonwriter 11y ago
> Money is just a reflection of production No, its not. The value ascribed to money is, of course, related to what it can be used for and how much of it is floating around, and production in the area where the particular form of money is the preferred medium of exchange is one of the factors that is relevant to that. And, perhaps the statement about governments not creating money meant that governments don't create value. Which would still be wrong, but in different ways.

deleted 11y ago

[deleted]

calibraxis 11y ago

Things we’re not supposed to notice: - Governments literally stamp their names and politician's faces on money. You're supposed to obtain it and give some back to the government. - There’s a distinction between government and economy, though government enforces capitalism (social relations of "property", police, etc), and attacks other nations which try alternatives. - The money supply is basically bureaucracy-points made on computers. "In God We Trust" is an apt description of how we're not supposed to question simple things. With the moralistic notion of "debt", we religiously consign children to awful fates.